Fin 328 Quiz 2 | Course Paper

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Match the selected items from a classified balance sheet and multiple-step income

statement to the section in which they would appear on the classified balance sheet or

the income statement.

a.Current Assets (balance sheet)

b.Property, Plant, & Equipment (balance sheet)

c.Current Liabilities (balance sheet)

d.Long-term Liabilities (balance sheet)

e.Stockholders’ Equity (balance sheet)

f.Operating Revenue (income statement)

g.Operating Expenses (income statement)

h.Other Revenue & Expenses (income statement)

i.Income Taxes (income statement)

Capital stock

Given below are three ratios calculated for Lantana, Tera, and Bake Companies for

2016 and 2015.

A)Which company has the best inventory management? Explain.

B)Which company has the best short-term financial health? Explain.

For each of the following accounts, indicate whether it is a balance sheet account or an

income statement account.

a.Balance sheet account

b.Income statement account

Retained Earnings

Given the following list of methods of depreciation, select the method that is best for

the situation or purpose given. (Select all that apply.)

This method is used in situations where technological advances are rapid.

a.Straight-line

b.Units-of-production

c.Double-declining-balance

d.MACRS

The purchase of office equipment at a cost of $2,600 with an immediate down payment

of $1,200 and agreement to pay the balance within 60 days is recorded in the accounts

by:

a.increasing Office Equipment for $2,600, increasing Accounts Receivable for $1,200,

and increasing Accounts Payable for $1,400.

b.increasing Accounts Receivable for $1,400, increasing Cash for $1,200, and

decreasing Office Equipment for

$2,600.

c.increasing Office Equipment for $2,600, decreasing Cash for $1,200, and increasing

Accounts Payable for

$1,400.

d.increasing Office Equipment for $2,600, decreasing Cash for $1,200, and decreasing

Accounts Receivable for $1,400.

The amount of a transaction may be immaterial by company standards but still be

considered significant by financial statement users.

a.True

b.False

The quality of accounting information that makes it comprehensible to those willing to

spend the necessary time is consistency.

a.True

b.False

Amortized discount is computed annually when a bond is issued for other than its face

value. For a bond issued at a discount, how will this component change as the bond

approaches maturity?

a.Decrease

b.Increase

c.Remain constant

d.Not enough information given to decide.

Given below is a list of items that may be reported on a statement of cash flows.

Identify each as one of the following using the indirect method:

a.Operating

b.Investing

c.Financing

d.Not separately reported on a statement of cash flows

Proceeds from the sale of a building

For the following items Questions 220-227, indicate whether each should be (a)

included or (b) excluded from the line item titled Cash and cash equivalents on the

balance sheet.

a.Included

b.Excluded

Shares of GM stock

Flannery Company uses a worksheet to prepare its statement of cash flows. The

company also uses the indirect method for the Operating Activities section of its

statement. For each of the following changes in the balance sheet, indicate what activity

it affects and whether it is an addition or deduction.

a.Deducted from Operating activity

b.Added to Operating activity

c.Deducted from Investing activity

d.Added to Investing activity

e.Deducted from Financing activity

f.Added to Financing activity

Capital stock increased